A World War could trigger ‘an immense spike’ in Bitcoin price, adoption, Covalent CEO says

Since the outbreak of war in Eastern Europe, Bitcoin and cryptocurrency have featured on both sides of the conflict.

In the case of Ukraine, at the start of the war, government officials called on the crypto community to donate funds. At the same time, Russia opted for a more inclusive approach, including U-turning on its previous plans for a crypto ban and formulating a legal framework.

According to the FT, the Bridgewater hedge fund said all of this points to the war being a catalyst for digital asset growth – more so as this comes at a time of maturation, particularly in relation to an institutional interest in cryptocurrencies.

“These shorter-term dynamics are occurring alongside structural changes in cryptocurrency markets that we believe are self-reinforcing, as adoption by key institutional investors increases and the surrounding ecosystem deepens.”

NATO Secretary-General Jens Stoltenberg warned that the Russia-Ukraine war could last for many years. In the six months since the outbreak, posturing between NATO and Russia, not forgetting tensions running hot between the U.S and China over Taiwan, demonstrate the threat of world war is a growing possibility.

With that, thoughts turn to the role of cryptocurrencies under such a scenario and whether World War 3 could be a spur for greater adoption and use.

Allied forces poke Russia and China

On June 20, Russian officials demanded Lithuania lift rail restrictions to Kaliningrad. The Russia exclave is located between Lithuania and Poland, to the east of Moscow, and receives goods from Russia by a railway route running through Lithuania.

NATO member Lithuania had banned the transport of goods between Russia and Kaliningrad due to the enforcement of EU sanctions.  The Russian Foreign Ministry responded by saying Russia has “the right to take actions that protect its national interests.”

Article 5 of the Washington Treaty stated an attack on a NATO member is an attack on all members and may result in “collective defense measures” against the attacker.

Fortunately, more than a month on, the incident has not escalated. Nonetheless, that flashpoint demonstrated the potential for tensions to erupt into something much greater.

Similarly, tensions between the U.S and China have become further strained over House Speaker Nancy Pelosi’s visit to Taiwan on August 2. Before the visit, in a phone call between President Xi and President Biden, Xi said, “those who play with fire will perish by it,” according…